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Berkshire Hathaway Inc. Message Board

  • hjclasvegas6969 hjclasvegas6969 Aug 4, 2013 12:28 PM Flag

    MAULDIN: The Stock Market Is Astoundingly Expensive And We Could Have A Historic Crash

    to spread cheer until hussman updates.

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    • The stock market doesn't have to undergo a sudden, catastrophic price drop (correction) to reduce the overvaluation. The price per share could just "mark time", or "tread water", for a decade while sales per share slowly grows to support the current price.

      My impression (based on my readings of the folks whose opinions I respect the most) is that a fair price for the S&P 500 is around one times sales.

      The current closing price per share (8/2/2013) was $1,709.67.

      Sales per share (TTM) was: $1,095.81 on 3/31/2013.

      To estimate a growth rate for sales per share requires another sales' figure. Sales per share (TTM) was:$1,069.27 on 3/31/2013 and $751.27 on 3/31/2001. That calculates to a nominal compound annual growth rate of 2.48% over the last year, and 3.20% over the last twelve years.

      • 2 Replies to jad1148
      • P/S is a metric that should always be looked at but to make a buy/sell decision on that alone makes little sense as one would be ignoring the profit margin on those sales. So per your thinking if BRK were to purchase a group of companies like Sysco, Sears, Tyson, etc. (huge sales, low margins) then in no time at all it would be a screaming buy. Again just go company by company and it won't take long to figure out that a number of high quality businesses are unlikely to ever have a valuation of 1X sales.

        Just keep reading those textbooks & formulas and hopefully the only $ you are investing is your own.......

      • Correction:

        Sales per share (TTM) was:$1,069.27 on 3/31/2012 ...

    • The statistics keep getting worse yet the US stock market keeps going higher. We now have 4 food stamp recipients per manufacturing job in this CONtry. We're at 47 Million on food stamps last I checked, but Brky assures me everything is going to plan. How could the market be wrong, he argues?? Seriously, how many "part time" burger flipper positions do we need to CONpensate for all the "full time" manufacturing jobs that have been lost??

      HC, correct me if I'm wrong, but unlike Krugman et al I don't recall Keynes ever proposing deficit spending forever on foodstamps, disability benefits and other non productive endeavors (far too many to mention) as a recipe for sustainable future prosperity. Maybe Next Leg Up Brky CON explain it to me, but I just don't get it - regardless of whoever is running the CONtry.

      Yes We CON!!! 20 more years!!! Buy Buy Buy!!! But between you and me, I'm starting to lose faith.

      • 4 Replies to missedinv102
      • baltbear Aug 4, 2013 8:47 PM Flag

        " We now have 4 food stamp recipients per manufacturing job" Yes. So what? REdo that stat for food stamps vs "financialiser" . BEtter yet, do mfg jobs against financial service jobs.
        One of the big lies screwing things up is the nonsense that the mkt "says" anything, right or wrong.
        What's the "product"?? in anything? In governance, it's the survival of the state. Period. Nothing else.
        By the lie passed around by which you are measuring "productivity" not one penny of the MIC and its multiplier effect is "productive." Not one penny's difference beyond crashworthiness exists between a Tata and a Bugatti. They both haul people someplace, roads permitting.
        Faith in what? Something that never was? good.

      • 16 times "astoundingly expensive"

        Check out the Bond Market, clown, if that's what u want!

      • To be clear, I only call for a next leg up when you call for a leg down. I don't know much, but I know that your market calls based on politics are destined to bat .100, if that. History proves that out. Sounds to me like you're making a call for the market to go down. Load up! Headed higher!

      • Stop the whining. We r at 16 times Earnings on market..averages 16.5
        And against very low rates that imply higher PEs always.
        There are always big problems.
        Stop the whining.


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